Posted on: 15th Aug, 2010 12:09 pm
what all is on a AL commitment letter for mortgage financing
Welcome nicoleb,
As far as I know, a Loan Commitment Letter is the document which an underwriter sends to the loan officer once the loan is approved. This letter will detail every aspect of the mortgage. This letter will include the terms and interest rate. It'll be dated and it will have an expiration date and may be signed by an underwriter. It is a legally binding document.
As far as I know, a Loan Commitment Letter is the document which an underwriter sends to the loan officer once the loan is approved. This letter will detail every aspect of the mortgage. This letter will include the terms and interest rate. It'll be dated and it will have an expiration date and may be signed by an underwriter. It is a legally binding document.
I don't know that Alabama has specific language which would need to be contained in a commitment letter for a mortgage, but you'll find that most such letters are pretty generic.
As stated above, you'll find the property address on which you're obtaining the new mortgage, the terms of the loan (rate, term, amount, etc.), and you'll also be made aware of any conditions of approval. For example, if you've not yet provided specific documentation verifying funds, or income, or some other variant, they'll be asking for you to provide that in the commitment letter.
Also, as Adonis mentioned, you'll find that there may be an expiration date. Ordinarily, though, such a date might have more to do with the age of documents you've provided to the lender. Most documents must be with 60 or 90 or 120 days of the closing date or you'll have to update. That will be clearly spelled out, however; just be prepared for any delays by keeping handy the documents you might need (bank statements, pay stubs, etc.). You might also find the expiration date of your interest rate if you have already locked it in.
If you've not locked in, you ought to see something discussing this, and there may be a clause that specifies a maximum interest rate that you can qualify for.
Needless to say, if you find anything that you don't understand, you ought to immediately contact your loan officer or the processor on the file to discuss what it might be and get clarity. You won't find too many underwriters signing these things, but that ought not to matter - whoever signs it will be signing on behalf of the lender.
As stated above, you'll find the property address on which you're obtaining the new mortgage, the terms of the loan (rate, term, amount, etc.), and you'll also be made aware of any conditions of approval. For example, if you've not yet provided specific documentation verifying funds, or income, or some other variant, they'll be asking for you to provide that in the commitment letter.
Also, as Adonis mentioned, you'll find that there may be an expiration date. Ordinarily, though, such a date might have more to do with the age of documents you've provided to the lender. Most documents must be with 60 or 90 or 120 days of the closing date or you'll have to update. That will be clearly spelled out, however; just be prepared for any delays by keeping handy the documents you might need (bank statements, pay stubs, etc.). You might also find the expiration date of your interest rate if you have already locked it in.
If you've not locked in, you ought to see something discussing this, and there may be a clause that specifies a maximum interest rate that you can qualify for.
Needless to say, if you find anything that you don't understand, you ought to immediately contact your loan officer or the processor on the file to discuss what it might be and get clarity. You won't find too many underwriters signing these things, but that ought not to matter - whoever signs it will be signing on behalf of the lender.
